Wednesday Night #1378

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Starting this Wednesday Night on a different note (!), our very special diva, Susanna Eyton-Jones, and Shem Guibbory will give a brief performance as a warm-up to their in-studio recording the following week. They will present a 13-minute chamber piece for violin and soprano entitled ‘Iglesia Abandonado’, by Stephen Hartke, (Ives Prize 2008 from The Academy of Arts and Letters, Guggenheim Award, etc., etc.- and a friend) on a poem by Federico Garcia Lorca, from Balada de la Gran Guerra. We are sure that Wednesday Night will guarantee an appreciative audience and a warm reception to our two talented friends.
But Wednesday Night cannot be all frivolity and mirth, as world events continue to implode, explode or possibly just plode. Thus, we will turn to some of the news of the day.
Oil is ever topical and just as some pundits were rejoicing in the drop in prices, tensions in Iran and Nigeria (we suggest that ‘tension’ is a pretty mild euphemism) send them upward. The Nigerian situation is particularly disheartening as the recent BBC story ‘Blood oil’ dripping from Nigeria points out. Meantime, the news from the U.S Geological Survey that the Arctic Circle holds an estimated 90 billion barrels of recoverable oil plus major natural gas reserves will set the Arctic nations on a head-to-head race, just when things looked somewhat settled.
And the credit crisis goes on with little hope of rebound, according to the IMF which sees no end in sight “Global financial markets are ‘fragile’ and indicators of systemic risk remain ‘elevated’ almost a year into the credit crisis”. Good thing that we are expecting Martin Barnes this week. No doubt he will have cheery tidings, or at least make them appear so in his inimitable way.
We were not sure whether to be hopeful when the Doha trade talks were extended past their shelf life of last Friday , but the news coming out of Monday’s meeting appears pretty grim. UPDATE: Doha trade talks collapse
Obama‘s triumphant trip overseas warrants attention. He seems to have charmed President Sarkozy, among many others. And despite dire predictions, there appears to be little if any backlash from the American voters.
Speaking of Sarkozy, there’s an interesting follow-up to comments made on Wednesday Night 1374 in a commentary by William Pfaff posted on Truthdig. The number of reforms the President has managed to push through is simply astounding.
News from Turkey again points to the topicality of Wednesday Night. Following Guillaume Lavoie’s articulate discussion of Kurdistan, we find ourselves watching news of the Kurds and the PKK with ever more interest.
And of course there is always China and the build-up to the opening of the Games. More on that next week with some keen observers.
Locally, we and the St Lambert Wednesday Nighters have the long-anticipated by-election clearly in view. We did not need to hear the news; the trees and lampposts burst into bloom with a medley of wild colors within about 12 hours of the writ being dropped (Note to self: ask Peter Trent why writs are ‘dropped’). Other than that, the political scene has been relatively quiet as the political animals head for the barbecue hustings despite the headlines trumpeting news of excessive advertising spending by the government of the day, and the inflation rate rising ‘above the comfort zone’ (there is a comfort zone?)
Finally, if all of this makes your head spin, try thinking about the Large Hadron Collider, and the experiment being conducted by CERN “to explore the fundamental constituents of matter by simulating conditions that existed a trillionth of a second after the Big Bang, the creation of the universe about 14 billion years ago”. There will NOT be a test!

The Report

The larger-than-usual gathering was reduced to uncharacteristic silence during the performance by Susanna and Shem, – such an incredibly talented duo -, which was applauded and lauded by all. For many, it had been a long time since we had heard Susanna sing and we were struck by the richness of her maturing voice. A real treat and an unusual first act for Wednesday Night, which was followed by an intense discussion of the economy and markets, led by Maureen Farrow (an unexpected and delightful addition) and our OWN Martin Barnes.

The collapse of the Doha round negotiations is worthy of note for several reasons. Although the various member nations were quick to blame each other, this was the probably the first time that affluent countries, although not as yet accepting responsibility, expressed the will to come to the aid of their disadvantaged neighbours. A clue to the lack of motivation of larger, more affluent nations to support poorer agricultural countries that had suffered disastrous crop failures, is the fact that Canada was not supportive but its southern hemisphere first cousin, Australia, was. The problem is the politically motivated stubborn resistance of most agricultural nations to abandon agricultural subsidies and trade barriers, a stand not taken by Australia. This unwillingness to come to the aid of less affluent countries does not augur well for agreement on such larger issues as the environment. Canada’s stand was very likely motivated by its umbilical cord relationship with the U.S. through NAFTA, as well as its internal problems with its agricultural system including the wheat board, provincial protectionist policies on agriculture and other inter-provincial problems. [As the Globe & Mail succinctly summarized it: “To gain credibility on the international trade scene, Canada must also rethink its position on supply management, our outdated system of marketing boards that provide protection for domestic producers of eggs, poultry and dairy products. It undermines our position when we call for tariff reductions elsewhere but maintain our own protectionist measures.”]
If we are going to have freer world trade, Canada will have to position itself away from the U.S., be more aggressive in the standardization of inter-provincial trade and take an independent stand internationally.

The economy
There is little to cheer about in the economy today. We have been through one of the greatest credit booms in history and it will take some time to work through an anticipated period of a weak, fragile economy. Merrill Lynch bit the bullet by cleaning up their balance sheet but there were few buyers at twenty-two cents on the dollar. The stock market has virtually stalled and it is anticipated that this will be the case for some time until the necessary band-aid efforts are eventually replaced by longer term planning and implementation of corrective measures. The U.S. had no choice but to remove the negatives before tackling the positives. It will take an estimated five years for the problems to work through the system. For investors, apparent buying opportunities turn out to be mirages and the alternative, namely cash, is rarely the place to be over the longer term.

Emerging markets
The emerging markets are still growing at an annual rate of approximately six percent. They are certainly not problem-free but their difficulties are not as great as those of North America.

Energy
Canadian oil stocks still represent good value, but several analysts see the price of oil declining, according to some, to one hundred dollars a barrel, to others to one hundred and thirty to one hundred and fifty in 2009. Part of the problem appears to be the lack of refinery facilities, but whatever the outlook in the near term, there is no doubt that at one point the world will have to deal with the fact that petroleum is in limited supply.
In the Western world, apart from complaints about rising fuel prices and the ripple effect on the cost of transported goods, especially food, very little appears to be being done. At least one Wednesday Nighter expresses the opinion that historically, people react by implementing creative solutions to life- threatening problems. In China and India, rapidly increasing affluence has created a greatly increased demand for carbon-based fuels. Their population’s demonstrated intellect and creativity will ultimately motivate them to find and implement solutions, as has happened in other circumstances in Europe in the past. In North America, politicians tend to arrive at decisions among themselves and announce their action plans to the public, apparently unaware that electors are at least as intelligent as the people they elect and will accept difficult decisions when an intelligent dialogue and explanation of the problem, alternative solutions and proposed action is undertaken prior to taking action.

Foreign takeovers
Canada, a stable, geographically safe, democratic, resource-rich country is an ideal target for investment by foreign investors and the possibility of mergers and takeovers of our resource sector by foreign investors (especially sovereign wealth funds) creates unease. Curiously, there appears to be no similar concern over investment by Canadians in foreign countries. While foreign takeovers mean the head offices move abroad and no tax is paid to the Canadian government, on the plus side, jobs are created and prosperity is enhanced in the host country. However, there is some trepidation over the resultant accrued wealth of oil-enriched investors in countries whose interests are actually or potentially inimical to those of the West.

The U.S. election
November U.S. elections continue to hold the interest of Wednesday Nighters. John McCain is currently slightly ahead of Barack Obama in Electoral College votes, but factors including the identity of running mates, the lingering Bush virus and the effectiveness of the current Republican dirty tricks campaign have yet to be factored in. For the first time it may be that the U.S. President will be elected on the basis of the Internet which Obama has successfully used to gather the youth vote. Just as the successful use of television is credited with JFK’s victory, it is very likely that the Internet will be the most important medium in determining the outcome of future U.S. elections.